Dubai economy showed signs of improvement in February, new data released by Emirates NBD Bank shows.
February data signalled a further improvement in overall business conditions across Dubai’s private sector economy, underpinned by sharp rises in output and incoming new work, with the growth of the latter picking up to a 24-month high.
At 56.2 in February, the seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registered above the crucial 50.0 threshold for the twelfth month in succession.
The latest reading was down from January’s 23-month high of 57.1, but was above the series average (55.1).
“The overall improvement in the health of Dubai’s private sector reflected another sharp upturn in business activity in February,” it said.
“The rate of output growth was stronger than the long-run series average, but eased from January’s 23-month high to its weakest in three months. Furthermore, all three key sub-sectors noted sharp increases in activity during February, led by wholesale & retail. Anecdotal evidence generally linked higher business activity to stronger underlying demand conditions.”
Dubai’s private sector employment was broadly unchanged in February, thereby ending a seven-month sequence of job creation.
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New work received by private sector companies in Dubai continued to rise in February. Additionally, the latest increase quickened to the sharpest since February 2015. A number of firms cited stronger market demand, supported by successful marketing and promotional strategies. Some firms also mentioned new client wins stemming from good reputation and quality.
Companies remained optimistic about their growth prospects for the year ahead. Travel and tourism firms were the most upbeat towards the 12-month outlook for activity, closely followed by wholesale and retail.
Wholesale and retail was the best performing category for the first time in six months (index at 58.3), followed by travel and tourism (index at 57.0). Meanwhile, construction companies recorded a slowdown in growth momentum during February, with the headline index down to 53.3, from 55.4 at the start of the year.
A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.
Input price inflation softened since January and was slight overall. Meanwhile, output charges continued to fall with the rate of discounting the weakest in three months and modest overall, the report said.